Carrier Rules for Limiting Charge 

Effective January 1, 1991, the maximum allowable actual charge (MAAC) for non- participating physicians is replaced by the limiting charge. The limiting charge is the maximum that the non-participating provider may charge the beneficiary.  It also effectively replaces the special charge limits for overpriced procedure, anesthesia associated with cataract and iridectomy surgery, A-mode ophthalmic ultrasound and intraocular lenses (IOLs, and designated specialty, because the limiting charge is always less than or equal to the special charge limits.

The limiting charge applies to all of the following services/supplies, regardless of who provides or bills for them, if the services/supplies are covered by the Medicare program and are provided:

• Physicians’ services;
• Services and supplies furnished incident to a physician’s services that are commonly furnished in a physician’s office;
• Outpatient physical therapy services furnished by an independently practicing physical therapist;
• Outpatient occupational therapy services furnished by an independently practicing occupational therapist;
• Diagnostic tests; and
• Radiation therapy services (including x-ray, radium, and radioactive isotope therapy, and materials and services of technicians).

 NOTE: This means that, effective for services/supplies provided on or after January 1, 1994, the limiting charge applies to drugs and biologicals provided incident to physicians’ services, to physical therapy services provided by independently practicing physical therapists, and to occupational therapy services provided by independently practicing occupational therapists. These changes are made because of provisions in OBRA 1993. OBRA 1993 expanded the limiting charge to apply to services/supplies which the law permits Medicare to pay for under the physician fee schedule methodology but which Medicare has chosen to pay for under some other method. “Incident to” drugs and biologicals, previously excluded from the limiting charge because of their exclusion from physician fee schedule payment, are, effective January 1, 1994, still excluded from physician fee schedule payment but subject to the limiting charge. Also, OBRA 1993 applies the limiting charge to all of the above listed services/supplies, regardless of who provides or bills for the services/supplies. No longer are services of suppliers and other nonphysicians, such as physician assistants, nurse midwives, and independently practicing physical and occupational therapists, excluded from the limiting charge.

Physicians, non-physician practitioners, and suppliers must take assignment on claims for drugs and biologicals furnished on or after February 1, 2001, under §114 of the Benefits Improvement and Protection Act (BIPA).

Effective January 1, 1993, the limiting charge is 115 percent of the fee schedule amount for nonparticipating physicians.

Participating fee schedule amount  $2000
Nonparticipating fee schedule amount $1900  (95% of $2000)
Limiting charge  $2185  ($1900 times 1.15)

Charges to either a payer for whom Medicare is secondary or to a payer under the indirect payment procedure are not subject to the limiting charge if the physician accepts the payment received as full payment (i.e., if there is no payment by the beneficiary).

The provider may round the limiting charge to the nearest dollar if they do so consistently for all services.